Palm oil dips on prospects of fall in July exports so far

Malaysian palm oil futures dropped over 1% on Friday, declining from two-week highs on expectations of a plunge in July 1-10 exports ahead of official supply and demand data.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange slid 37 ringgit, or 1.5%, to 2,367 ringgit ($554.14) a tonne by 0243 GMT.

However, the contract is set to post a 0.5% weekly rise after falling for two weeks.

The Malaysian Palm Oil Board and cargo surveyors are expected to release industry performance data later in the day.

The market is expecting Malaysia’s palm oil exports in the July 1-10 period to fall around 15% from the previous month, according to traders on Thursday.

A Reuters poll showed Malaysia’s palm oil inventories in June likely fell about 5% from May as demand recovered after coronavirus-related curbs eased.

Oil prices dipped on worries of renewed lockdowns following a surge in coronavirus cases in the United States, making palm less attractive as biodiesel feedstock.

Dalian’s most-active soyoil contract fell 0.55%, while its palm oil contract was down 2.04%. Soyoil prices on the Chicago Board of Trade were also trading down 0.45%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.